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HomeMy WebLinkAbout97-1583 civilERIE INSURANCE EXCHANGE, : IN THE COURT OF COMMON PLEAS OF Plaintiff : CUMBERLAND COUNTY, PENNSYLVANIA V. : : NO. 97-1583 CIVIL TERM JAMES B. McNERNEY, Sr., : BRANDON K. SCHROLL, TYLER : KAPP, and JAMES LAUCK, : CIVIL ACTION: For Declaratory Judgment Defendants : IN RE: PLAINTIFF'S AND DEFENDANTS' CROSS MOTIONS FOR SUMMARY JUDGMENT Before HOFFER, P.J. and OLER, J. ORDER OF COURT AND NOW, January 16, 1998, pursuant to the Opinion filed this date, and after headng oral argument and careful consideration of the parties' briefs, Plaintiff's Motion for Summary Judgment is denied and Defendants' Motion for Summary Judgment is granted. ~ p,j, Kathleen A. Wolowski, Esquire McNees, Wallace & Nurick 100 Pine Street P.O. Box 1166 Harrisburg, PA 17108-1166 For the Plaintiff Jeffrey R. Stoner, Esquire Cozen and O'Connor 1900 Market Street Philadelphia, PA 19103 For the Defendant James P. McNerney, Sr. ERIE INSURANCE EXCHANGE, : IN THE COURT OF COMMON PLEAS OF Plaintiff : CUMBERLAND COUNTY, PENNSYLVANIA V, : NO. 97-1583 CIVIL TERM JAMES B. McNERNEY, Sr., BRANDON K. SCHROLL, TYLER : KAPP and JAMES LAUCK, : CIVIL ACTION: For Declaratory Judgment Defendants : IN RE: PLAINTIFF'S AND DEFENDANTS' CROSS MOTIONS FOR SUMMARY JUDGMENT BEFORE HOFFER, P.J. AND OLER, J. OPINION HOFFER, P.J.: In this opinion, we address Plaintiff's and Defendants' Cross Motions for Summary Judgment. The impetus of this dispute is a fire, which occurred on February 13, 1995, at a former Pizza Hut building in Camp Hill, Pennsylvania. The building, owned by Defendant James B. McNerney, Sr., was completely destroyed. The parties agree that this case is purely a question of law and should be settled by summary judgment. FACTUAL BACKGROUND On February 13, 1995, Brandon K. Schroll, Tyler Kapp, and James Lauck entered the parking lot of the former Pizza Hut because Kapp needed to use the pay phone. Schroll and Lauck went to the rear of the building where they found an abandoned sofa sitting under the eaves of the building. Schroll and Lauck lit some nearby newspaper and shoved it into one of the sofa cushions. An area of the sofa, about the size of a small melon, began to burn with flames approximately 97-1583 CIVIL TERM six inches high. Kapp completed his phone call and proceeded to the rear of the building. When he saw the flames, he was not happy with his friends. All three of the young men then attempted to put out the fire. They patted down the cushion and poured soda on it to extinguish the flames. They worked to put out the fire for seven to eight minutes. When they believed the fire to be fully extinguished, they left the scene. Schroll, Kapp and Lauck then went to a friend's home, nearby. When they left the friend's home they saw smoke in the distance. The young men followed the smoke to the site of the former Pizza Hut which was now engulfed in flames. Although they had no intention to burn down the building, it was clear to them that the fire they had started in the sofa had not in fact been extinguished and had smoldered and ignited the building. As a result, the former Pizza Hut was completely destroyed. At the time of the fire, the building was insured by St. Paul Fire and Marine Insurance Company. St. Paul found the actual cash value of the damage to McNemey's building to be $145,865.60. Due to the fact that the building had been vacant for more than sixty days, the amount paid to McNemey was reduced by fifteen percent, in addition to his $1000 deductible. McNerney ultimately received 97-1583 CIVIL TERM $122,985.76 from St. Paul. Therefore, McNerney suffered an uninsured loss of $22,879.84, based upon St. Paul's calculations. Schroll, Kapp and Lauck were eventually apprehended for their involvement in the fire. At the time of the fire, Schroll was eighteen years old. He lived at home with his parents. Schroll was insured under his parents' homeowner's policy issued by Plaintiff Erie Insurance Exchange. After the fire, McNerney and St. Paul made a demand on Schroll to recover for the damage sustained in the fire. Schroll forwarded this demand to Erie. Erie subsequently denied coverage based upon the "expected or intended" exclusion in the policy. 1 A provision in the Erie policy states that: We will pay all sums up to the amount shown on the declarations, which anyone we protect becomes legally obligated to pay as damages because of bodily injury or property damage resulting from an occurrence dudng a policy pedod. We will pay for only bodily injury or property damage covered by this policy. Plaintiff's Complaint, p. 4. Erie defined an occurrence as "an accident, including continuous or repeated exposure to the same general harmful conditions." Plaintiff's Complaint, p. 5. Defendants contend that the fire damage to the former ~ The exact provision in the Erie policy is: "We do not cover under Personal Liability Coverage and Medical Payments To Others Coverage: (1) Bodily injury or property damage expected or intended by anyone we protect." Plaintiff's Complaint, p. 4. 3 97-1583 CIVIL TERM Pizza Hut was an occurrence, as defined by the Erie policy. According to Defendants, the damage was accidental because Schroll, Kapp and Lauck did not intend or expect the Pizza Hut building to catch fire or to be destroyed. Therefore, Defendants argue that the 'expected or intended" exclusion does not apply and that Erie does have a duty to defend and a duty to indemnify Schroll. Plaintiff filed this declaratory judgment action on March 27, 1997. Plaintiff's Complaint requests a declaration "that Erie is not obligated to provide coverage or a defense to Schroll with respect to any and all crimes asserted against him arising out of his conduct on' or about February 13, 1995, on the Pizza Hut premises."2 Plaintiff's argument is based on an allegation that the destruction of the former Pizza Hut building caused by the fire was of the same general type of damage intended or expected by Schroll, Kapp, and Lauck when they lit the abandoned couch on fire. DISCUSSION Motions for summary judgment are governed by Pa.R.C.P. 1035.2 which provides that: After the relevant pleadings are closed, but within such 2 This Court will only determine if Erie has a duty to defend Schroll in any pending or future litigation arising from his actions at the former Pizza Hut on February 13, 1995. The duty to defend is a broader duty than the duty to indemnify. See Nationwide Insurance v. Board of Trustees of the University of Illinois, 116 F.3d 1154 (7th Cir. 1997). 97-1583 CIVIL TERM time as not to unreasonably delay trial, any party may move for summary judgment in whole or in part as a matter of law (1) whenever there is no genuine issue of any material fact as to a necessary element of the cause of action or defense which could be established by additional discovery or expert report, or (2) if, after the completion of discovery relevant to the motion, including the production of expert reports, an adverse party who will bear the burden of proof at trial has failed to produce evidence of facts essential to the cause of action or defense which in a jury trial would require the issues to be submitted to a jury. Pa.R.C.P. 1035.2. In deciding a motion for summary judgment, the Court will "view the record in the light most favorable to the non moving party, and all doubts as to the existence of a genuine issue of material fact must be resolved against the moving party." Ertel v. Patriot News Co., 544 Pa. 93, , 674 A.2d 1038, 1041 (1996). DAMAGE TO THE FORMER PIZZA HUT The task of this Court is to determine if, under the terms of the Ede policy, the damage to the former Pizza Hut falls under the clause in the policy which excludes damage "expected or intended" by the insured. We find that, as a matter of law, the damage to the former Pizza Hut, caused by Schroll, was not expected 5 97-1583 CIVIL TERM or intended.3 Erie is therefore obligated to defend Schroll in any pending or future litigation arising from the incidents which occurred at the former Pizza Hut on February 13, 1995. This Court bases its decision on the holding in Eisenman v. Hornberger, 438 Pa. 46, 264 A.2d 673 (1970). We believe that the circumstances at issue in the case at bar are most factually analogous to the facts in Eisenman. In Eisenman v. Hornberger, youthful offenders broke into a home to steal alcohol. They walked through the home, using matches to light their way. As each matched burned down, it was dropped to the ground. After the young men departed, one of the matches smoldered in a stuffed chair, caught fire and totally destroyed the residence. Eisenman v. Hornberger, 438 Pa. 46, 264 A.2d 673 (1970). One of the boys who broke into the Eisenman home was insured under his parent's homeowners' policy. The insurer attempted to use the exclusion provision in the policy which said that damage will not be covered if caused intentionally by 3 In United Services Automobile Association v. Elitzky, 358 Pa. Super. 362, 517 A.2d 982 (1986), the Superior Court discussed the distinction between intended and expected when interpreting an insurance policy exclusion provision. The court defined expected as including an element of conscious awareness. Id.~. at 379, 517 A.2d at 991. The court went further to hold that, in Pennsylvania, "intentional and expected are synonymous for purposes of insurance exclusionary clauses." Id.._~. at 380, 517 A.2d at 991. 6 97-1583 CIVIL TERM or at the direction of the insured. Eisenman at 49, 264 A.2d at 674. The court found that "[t]here is a very real distinction between intending an act and intending a result and the policy exclusion addresses itself quite clearly to the latter." Id. The court therefore held that because there was no basis on which to conclude that the insured intended total destruction of the home, the insurance company must provide coverage. Id. Our holding in the case at bar is controlled by the Pennsylvania Supreme Court's holding in Eisenman. As with someone who lights matches, believing them to be extinguished, drops them to the ground, and later finds a home totally destroyed, Schroll, Kapp, and Lauck were surprised by the destruction of the former Pizza Hut. They did ignite the couch but they did not leave the scene until they believed that the fire was fully extinguished. It was their negligence in attempting to extinguish the fire that caused the destruction of the Pizza Hut. Like the boys in Eisenman, Schroll, Kapp and Lauck's intentional acts resulted in damage which they did not intend or expect. Therefore, Erie is obligated to defend Schroll in any litigation concerning the events of February 13, 1995. The Plaintiff relies on two cases, United Services Automobile v. Elitzky, 385 Pa. Super. 362, 517 A.2d 982 (1986), and Nationwide Insurance v. Board of 97-1583 CIVIL TERM Trustees of the University of Illinois, 116 F.3d 1154 (7th Cir. 1997)4, to argue that they should not be compelled to defend Schroll. Both of these cases deal with exclusion provisions in homeowner's insurance policies. Neither case controls the outcome of the case at bar. United Services Automobile Association v. Elitzky, 385 Pa. Super. 362, 517 A.2d 982 (1986), involved an insurance company which filed a declaratory judgment action to get a determination that it need not defend its insureds who were subjects of a defamation suit. The Superior Court addressed the decision in Eisenman in the Elitzky opinion. The court said that "Eisenman appears to align Pennsylvania with those jurisdictions which hold that the exclusion applies if the insured intended to cause harm of the same general type as that which did occur." United Services Automobile Association at 372, 517 A.2d at 987. Erie points to the above language to try to convince the Court that Erie should not be obligated to defend Schroll. They argue that the damage intentionally caused by Schroll, Kapp and Lauck when they lit the couch on fire and the total destruction of the former Pizza Hut that actually resulted was of the same general type and should therefore be considered "intended or expected" by Schroll ' The Nationwide Insurance v. Board of Trustees of the University of Illinois, 116 F.3d 1154 (7th Cir. 1997), decision comes from the 7th Circuit but it addresses Pennsylvania law because the insurance policy in question was issued in Pennsylvania. 8 97-1583 CIVIL TERM and excluded from coverage under the Erie policy. We believe that the destruction of the former Pizza Hut was not damage of the same general type as the damage Schroll and his friends intended or expected when they lit the abandoned couch on fire. The facts in this case compel this conclusion because Schroll and his friends lit only the couch on fire and did not intend or expect for there to be damage to the former Pizza Hut. They did not leave the scene until they believed that the fire in the couch was fully extinguished. In this case, Erie is obligated to defend Schroll for accidental damage brought upon by the negligence of his actions.~ Erie also directs this Court's attention to Nationwide Insurance v. Board of Trustees of the University of Illinois, 116 F.3d 1154 (Tth Cir. 1997). This is a decision from the United States Court of Appeals, 7th Circuit, in which the court addressed the interpretation of a homeowner's policy. The policy was issued in Pennsylvania and therefore controlled by Pennsylvania law. Id_._~. at 1155. In Nationwide, the insured attempted to mark an astroturf football field with the letters F-O-O so that the letters could be read from above during a football game. Id._~. at 1156. The insured used lighter fluid to form the letters, then lit them on fire to s Erie has made an argument that Pennsylvania public policy will be violated if Erie is compelled to defend Schroll. This argument fails because it is clear that the purpose of liability insurance is to provide coverage for accidents. 9 97-1583 CIVIL TERM make the mark. !.d. The insured, in a drunken haze, left the stadium while the letters were still burning, making no attempt to extinguish the fire. Id. at 1157. The fire to the astroturf football field resulted in damage in excess of $600,000. Id~ at 1155. The insured in Nationwide Insurance testified that he did not intend for extensive damage to result, even claiming that he did not believe any damage to the astroturf would result. Id. at 1156. The court rejected the insured' claims and found that the insurance company was not obligated to defend the insured in litigation concerning damage to the football field. Id. at 1158. Even if Nationwide Insurance is a precedent to follow, the case is distinguishable from the facts of the case at bar. The insured in Nationwide Insurance walked away from the fire he started in the mistaken belief that it would not cause any permanent damage. Nationwide Insurance at 1157. The destruction of the football field, a result of the fire, was damage of the same type that the insured could have expected when he lit the football field on fire in an attempt to mark the playing surface for all to see. Id. at 1156. The insured's drunken haze did not excuse his actions because the damage to the football field was a direct result of the insured intentionally lighting it on fire. Instead, Schroll, Kapp and Lauck attempted to extinguish the fire they started l0 97-1583 CIVIL TERM in the couch and they did not leave the scene until they believed that the fire was out. The fire that destroyed the former Pizza Hut was a result of their negligent, botched attempt to extinguish the fire in the couch. They did not intend or expect the former Pizza Hut to be destroyed because they did not light that structure on fire. The damage to the former Pizza Hut resulted after Schroll and his friends believed the fire they started in the couch was out. In conclusion, Erie is obligated to defend Schroll in any pending or future litigation related to his actions at the former Pizza Hut on February 13, 1995. In accord with this opinion, Plaintiff's Motion for Summary Judgment is denied and Defendants' Motion for Summary Judgment is granted.